INTOSAI CONTRIBUTION
TO THE
UNITED NATIONS CONFERENCE
ON SUSTAINABLE DEVELOPMENT
(RIO+20)

INTOSAI Contribution to the
Rio + 20 Conference of the United Nations on Sustainable
Development

Supreme Audit Institutions (SAIs) are cornerstones of good governance and play with
their audits of government operations - including the economic, environmental and
social sphere - a vital role in the area of sustainable development. SAIs provide
independent and reliable information on government spending and operations which
facilitates transparency and accountability and contributes to the implementation of
the Millennium Development Goals (MDGs).
To be able to contribute to sustainable development effectively, SAIs must be
independent of the governmental agencies they audit, and be protected from any
form of outside influence. The Declarations of Lima (1977) and Mexico (2007)
delineated the basic principles of independence of public sector auditing by SAIs.
On 26 April 2011, ECOSOC recognized the important role of INTOSAI and the
Declarations of Lima and Mexico by adopting resolution 2011/2, which states in its
OP 2:

?Takes note with appreciation of the work of the International Organization of Supreme Audit
Institutions in promoting greater transparency, accountability and efficient and effective receipt and
use of public resources for the benefit of citizens and of the Lima Declaration of Guidelines on Auditing
Precepts of 1977 and the Mexico Declaration of Supreme Audit Institutions Independence of 2007,
which set out the principles of independence in government auditing, and encourages the wide
dissemination of these principles;?

On the occasion of the 21st UN-INTOSAI Symposium on ?Effective practices of
cooperation between supreme audit institutions and citizens to enhance public
accountability? the United Nations invited INTOSAI to contribute to the Rio + 20 UNConference
on Sustainable Development in 2012.

INTOSAI warmly welcomes the invitation, especially in the light of the fact that
sustainable development has emerged as a relevant issue in the work of the audit
institutions worldwide: ?Environmental Auditing and Sustainable Development? was
one main theme of INTOSAI?s last triennial congress of Supreme Audit Institutions,
INCOSAI XX, held in Johannesburg in November 2010. In that congress, all SAIs
committed to prioritizing environmental and sustainable development issues in their
audit work while multilateral environmental agreements and coordinated audits
between SAIs were underlined as key focus areas.

INTOSAI aims to further improve the use of audit instruments in the field of
environmental protection policies through its Working Group on Environmental
Auditing (WGEA), chaired by the Auditor General of the National Audit Office of
Estonia. The WGEA has already started to prepare for the Rio+20 event with its
special project team working on a document compiling the experiences of SAIs on
sustainable development related issues. We would appreciate it if you considered
involving INTOSAI to the preparatory process as early on as possible.

The INTOSAI WGEA will additionally take part of the UNEP World Congress on
Justice, Governance and Law for Environmental Sustainability, which will be held
prior to Rio+20.

Following the Rio+20 invitation the Governing Board of INTOSAI suggests to include
a reference to the work of SAIs in the area of sustainable development and the
therefore necessary preconditions in the final document of the Conference as follows:
- Recalling the UN Millennium Declaration;
- recalling the ECOSOC resolution 2011/2;
- emphasizing that efficient, accountable, effective and transparent public
administration has a key role to play in the implementation of the
internationally-agreed development goals, including the MDGs and multilateral
environmental agreements;
- emphasizing the need to improve the efficiency, transparency and
accountability of public administration in order to contribute more effectively to
the implementation of the MDG and sustainable development;
- recognizing SAIs role in the improvement of efficiency, transparency and
accountability of public administration, which is conducive to achieving the
internationally agreed development goals, including the MDGs and multilateral
environmental agreements;
- emphasizing the importance of SAIs? independence from the agencies they
audit;
- recognizing the crucial role SAIs can play in achieving the international goals
of identifying and addressing the gaps and building accountability in the
implementation process of the global sustainable development agenda;
- taking note with appreciation of the work of INTOSAI and the Declarations of
Lima and Mexico as well as the recommendations of the XX INCOSAI;
- calling upon UN member states to implement and apply the principles set out
in the Lima and Mexico declarations in order to improve the position of SAIs to
contribute to sustainable development.

WGEA Rio+20 Project ? Report Summary

Environmental auditing supports better governance

Good governance, the process of decision-making and the process by which decisions are
implemented or in turn not implemented, is essential to ensuring that environmental protection
and sustainable development promises produce credible results. Governance is one of the key
themes to be addressed at the United Nations Conference on Sustainable Development (or
Rio+20) to be held in Rio de Janeiro, Brazil on 4-6 June 2012.

National auditors and their audits play a critical role in supporting good governance by
advancing accountability, and providing practical, objective and rigorous examinations of how
environmental and sustainability programs, regulations, targets and laws are managed and
implemented at the national and international level. Some countries have regional auditors or
evaluators that play a similar role. This paper summarizes some key observations from two
decades of work by supreme audit institutions, which play a major role in auditing government
accounts and operations.

Supreme audit organizations (SAIs) go by different names ? sometimes National Audit Office,
Court of Audit, Audit Board, and Office of the Auditor General ? and have different mandates but
similar responsibilities to provide legislatures and society with the information they need to hold
governments accountable. SAIs audit governments? financial management, compliance with
domestic laws and international agreements, domestic and international policy implementation
and performance. SAIs are independent, non-political, and fact-based in their work. Between
1993 and 2011, National audit offices in 107 countries have conducted over 3200
environmentally related financial, compliance and performance audits.

Environmental audits have resulted in governments taking action to improve Water quality in
rivers, strengthen protection of flora and fauna, and reduce pollution. Benefits to environmental
governance include the development of new legislation and regulations and stronger
compliance with those that already exist. The implementation of multilateral environmental
agreements has been improved through elements such as improving the designs of linked
programs and better results reporting mechanisms.

The vast majority of SAIs? environmental audits have examined national and sub-national
programs such as climate change, acid raid, toxic substances, biodiversity, protected areas and
natural parks, environmental assessment, green economy ? sustainable energy, sustainable
development, environment and human health, forestry, fisheries, mining, waste, Water, and
multilateral environmental agreements (MEAs). With regards to MEAs, around 80 audits were
conducted between 2003 and 2011 on agreements such as the Kyoto Protocol, UN Framework
Convention on Climate Change, UN Convention on Biodiversity, UN Convention to Combat
Desertification, Montreal Protocol, and Basel Convention. A comprehensive database of these
audits can be found at www.environmental-auditing.org.

Since 1992 the International Organization for Supreme Audit Institutions (INTOSAI), the
professional association for SAIs, has had an active Working Group on Environmental Auditing.
The Working Group has assisted SAIs in acquiring a better understanding of the specific issues
involved in environmental auditing; facilitating the exchange of information and experience
among SAIs; and publishing guidelines and other informative material for their use. Joint
auditing by SAIs of cross border environmental issues and policies, and the audit of
international environmental accords, has had the Working Group?s special attention.

The Working Group has worked with the United Nations Environment Programme to develop a
Guide on Auditing the Implementation of Multilateral Environmental Agreements. The objective
of the Guide is to serve as a useful resource for auditors worldwide who evaluate the
implementation of those agreements by their national governments and whether the policy tools
that their governments use to manage and protect the environment and implement MEAs have
produced the intended results. The guide can also be useful in improving future MEAs as it
identifies key aspects that we look for in our audits that are important to good governance and
accountability.

The Working Group has also produced a number of other guidance documents to aid auditors in
auditing a variety of issues including climate change, waste management, Water, forestry, and
sustainable development. An important upcoming guidance document in 2012 will be on
environmental data.

Under the auspices of the Working Group and its regional groups, a number of cooperative
audits between different SAIs have been undertaken. The Coordinated International Audit on
Climate Change: Key Implications for Governments and their Auditors (2010) involved fourteen
supreme audit institutions (Australia, Austria, Brazil, Canada, Estonia, Finland, Greece,
Republic of Indonesia, Norway, Poland, Slovenia, South Africa, United Kingdom, and United
States of America) from six continents who worked cooperatively to design and undertake
performance audits of their national governments? implementation of commitments and
programs related to the mitigation of and adaptation to climate change. The SAIs involved
included those from both developing and developed countries and the results from 33 audits.

Amongst the six regional groups of the Working Group on Environmental Auditing, over 50
cooperative audits have been conducted since 1995. Important ones have included:

- European Organization of SAIs ? Convention on the Protection of the Black Sea Against
Pollution Audit (2011, 6 SAIs)

Putting Our Audits to Work

In 2011, a survey of the members of the INTOSAI Working Group on Environmental Auditing
was conducted for this paper to identify the key observations that SAIs around the world are
consistently finding when conducting their environmental audits. The ten top issues identified by
37 countries are listed below along with examples of the type of issues identified.

- Unclear/overlapping of responsibilities ? In some audits the institutional framework
for sustainable development is cross-governmental and requires more work from
governments in order to integrate economic, social, and environmental aspects.
Governments have adapted to this new reality by creating more integration among
ministries, departments and agencies, and among programs and projects. However,
there is a lack of clarity regarding the specific role each one of those entities plays and
what they are responsible for, resulting in overlapping of responsibilities across agencies
and departments that compromise the effectiveness of policy coordination and generate
duplication of efforts.

- Lack of coordination between sub-national levels and the national level ? Through
the audits conducted, it has been noted that environmental problems occur at all levels
from local to global, and involve municipal, regional and national governments. There is
a need to improve integration and coordination between governance institutions at
different levels. When local entities are involved in implementing national policies and in
the interest of transparency and accountability for national funds and results, it is
essential that some credible and verifiable means exist for reporting on how these funds
were spent and what results were achieved.

- Absent or deficient policy or strategy ? According to some audits some governments
have not yet created effective policy tools and systems to govern environment and
sustainable development or have not improved public policy tools and process as
demanded. With regards to some policies, targets, objectives, or commitments may be
in place but they are not always supported by comprehensive and specific national,
regional or sectoral strategies and plans. Without the involvement by all affected levels
of government an overall policy or strategy cannot hope to achieve the desired national
results.

- Insufficient assessment of environmental impacts of governmental policies and
programs ? Audits have noted that governments are not using policy tools to ensure
more timely consideration of environmental aspects before large sums are committed to
a policy, program or project. High-level regulatory impact assessment or strategic
environmental assessment is not a concern for many governments.

- Lack of analysis (economic, social, and environmental) supporting decisions ? In
some audits the findings have noted that policy makers are not taking into account the
three pillars of sustainable development ? economic, social, and environmental aspects -
when making decisions. Sustainable development governance requires better
?integration? of economic, social and environmental policies, particularly within the
broader development planning frameworks.

- Lack of long-term planning to implement environmental policies and programs ?
Audits have noted that issues requiring long-term planning to resolve, such as climate
change adaptation, do not have corresponding planning processes or plans in place.

- Inadequate financial management of environmental policies and programs ?
Audits have noted financial management problems can be caused by: insufficient
planning resulting in the costs of delivering environmental policies and programs not
being anticipated and programmes then requiring an extensive amount of unanticipated
funds; lack of appropriate financial management framework to support the
implementation of environmental policies and programs; and lack of financial
management skills and misuse of funds.

- Lack of enforcement of domestic environmental legislation ? National audits have
indicated that environmental laws are not self-executing and governments must ensure
compliance with domestic environmental legislation, by taking appropriate, effective and
proportionate policy measures. It requires administrative capacities and strong
government commitments to implement and enforce the regulatory framework.

- Deficient monitoring and reporting systems ? Through the audits it was noted that
high-quality accountability and reporting systems are often lacking. Evaluation of key
policy choices and instruments is not always in place. In the absence of good evaluation
it is difficult for governments to report and measure their progress towards sustainable
development and identify where further policy action is required.

- Lack of environmental data for decision-making ? Audits have noted that
government bodies do not have sufficient and robust environmental data to support their
decisions and to evaluate their performance. There are problems in data availability,
timeliness, quality, and accuracy. Overall, there is a lack of knowledge and information
about various aspects of ecosystems and a failure to adequately use the existing
information to support management decision. Independent environmental audits can
collect and report information for decision-makers where information is lacking.

For the participating national governments at the United Nations Conference on Sustainable
Development to be held in Rio de Janeiro, Brazil on 4-6 June 2012, the lessons are twofold.
First, national governments can use the survey results and national audit reports, findings and
recommendations to improve the effectiveness and cost-efficiency of a range of domestic
environmental and sustainable development programs, policies and tools. The results of twenty
years of national auditing work can also be used to better design and implement national
policies and programs moving forward. Second, at the international level, the results of this
survey and the audits conducted by SAIs can provide national governments as well as MEA
secretariats with important feedback for evaluating the implementation of international
comments. They also show national governments and MEA secretariats the key features of
good governance that should be built in from the start against which compliance can be
monitored.

The full report will be published in time for the conference in Rio de Janeiro in June 2012.

Background on INTOSAI

The International Organization for Supreme Audit Institutions (INTOSAI, www.intosai.org), as a
non-governmental organization, is the professional association of SAIs in countries that belong
to the United Nations or its specialized agencies. INTOSAI provides a forum in which
government auditors from around the world can discuss issues of mutual concern and keep
abreast of the latest developments in auditing and other applicable professional standards and
best practices.

INTOSAI has increasingly recognized over the past two decades that the environment and
sustainable development is an important issue that requires attention by the auditing
community. The relevance of this topic was recognized by INTOSAI through the establishment
of an active Working Group on Environmental Auditing (www.environmental-auditing.org) in
1992, the same year that the United Nations Earth Summit was held in Rio de Janeiro. At
INTOSAI?s most recent triennial International Congress of Supreme Audit Institutions (INCOSAI
XX) held in 2010 in Johannesburg, South Africa, the resulting Johannesburg Accords noted that
?environmental protection and sustainable development is one of the most topical issues that
face governments in the new millennium.? In addition, ?the expectation that sustainable
development and environmental protection should be subject to independent audit by SAIs has
grown in the last decades. By exercising the highest values of professionalism, independence,
objectivity and transparency, and through effective cooperation with fellow SAIs on
environmental issues of common interest, SAIs can make significant contributions toward
addressing sustainable developments issues that are becoming increasingly regional, and even
global, in nature.?